Colorado Option health insurance bill staggers closer to legislative finish line

One Senate Democrat joined Republicans on Wednesday to oppose a controversial health care reform bill, which nonetheless moved forward in the Colorado Legislature after hours of debate and plenty of big changes.

House Bill 21-1232 started out as a framework for a public option health insurance plan that would have been established by the state if private insurance carriers failed to lower premium rates for plans on Colorado’s individual market. Now, HB-1232 looks much different — and would do far less to change the health insurance landscape — but it’s still one of the most polarizing bills of the legislative session.

Democratic Reps. Dylan Roberts of Avon and Iman Jodeh of Aurora led the charge on HB-1232, along with Sen. Kerry Donovan, a Vail Democrat, in the Senate. Their goal, they said, was to make health insurance more affordable for people who didn’t qualify for Medicare or Medicaid and didn’t get insurance from a large employer. Individual Coloradans and small businesses can purchase insurance on the state’s exchange, but premiums are too high for people to afford in some areas of the state.

Donovan said on the Senate floor Tuesday that she’d heard from constituents who were forced to choose “between a mortgage or their health care, or they had to spend down their child’s college savings fund so that they could buy a health care plan — or that the reason they moved to the mountains was to ski, and they’re not going to do that this year because they can’t afford health care.”

The bill passed the Senate on a vote of 19-16 on Wednesday, with Sen. Rachel Zenzinger, an Arvada Democrat, and all Republicans opposed.

HB-1232’s long journey isn’t over, yet. The House must vote to concur with Senate amendments before it heads to Gov. Jared Polis’ desk.

Groups spent big to oppose bill

But the legislation has come a long way from where it began in March. Originally, House Bill 21-1232 would have created a two-phase path to a government-established, nonprofit-managed public option for health insurance. The Colorado Option would have kicked in, in phase two, if insurers failed in phase one to meet premium reduction targets for standardized insurance plans sold on the individual and small-group market.

The bill’s sponsors scrapped the second phase — the public option — after weeks of extensive negotiations with groups representing hospitals, doctors and insurance carriers. The current version of HB-1232 would direct the state’s insurance commissioner to establish a standardized health plan that private carriers would be required to offer on the exchange, Connect for Health Colorado, starting in 2022. Carriers would need to reduce their premium rates on individual and small-group standardized plans by a total of 18% over three years, starting in 2023.

Some groups that had been opposed to HB-1232, including the Colorado Hospital Association, switched to a neutral position following that major rewrite.

But plenty of others remain opposed. HB-1232’s most well-funded enemies amassed hundreds of thousands of dollars in lobbying expenses throughout the legislative session. They include Partnership for America’s Health Care Future, a national association of health care industry players; Pharmaceutical Research and Manufacturers of America, or PhRMA, which represents pharmaceutical companies; and Americans for Prosperity, a conservative political advocacy group.

Much of that lobbying money has been directed at shaping public opinion via advertising. PhRMA spent more than $424,000 in March alone on digital and radio ads opposing HB-1232, according to expenses reported to the Colorado secretary of state’s office.

Virginia-based United Seniors For America, a conservative advocacy group opposed to government rate-setting in health care, launched a six-figure ad campaign starting May 19 in The Denver Post opposing the Colorado Option bill. And the Washington-based Taxpayers Protection Alliance — another nonprofit advocacy group that does not disclose its funders — is paying for a six-figure ad campaign aimed at pressuring legislators to oppose the bill, according to a communications firm, Ainsley Shea, that released statements about both campaigns.

Besides national organizations, the Colorado Option legislation is opposed by health insurance carriers, physician groups and business groups throughout Colorado — and Republicans, who say requiring carriers to offer a lower-cost plan will end up costing hospitals and providers.

“Does this bill say you’ll pay less for health insurance? Nope. Does it say you’ll have better access to a doctor? Nope,” Minority Leader Chris Holbert, a Douglas County Republican, argued during floor debate Tuesday. “What would this bill do? It would equip our insurance commissioner to use a heavy hand against people who are regulated … people like doctors, physician’s assistants, therapists, people who help you heal, who might save your life.”

On the other hand, the bill’s supporters include the Center for Health Progress, a Colorado organization that advocates for equitable access to care; the Colorado Children’s Campaign, which advocates for improving and expanding benefits for children and families; and the Colorado Consumer Health Initiative, or CCHI, which aims to increase health care equity and accessibility.

While HB-1232’s supporters lacked the monetary prowess of its opponents, one national lobbying firm that supports the bill — United States of Care — reported $28,000 in consulting expenses for February and March.

“We are thrilled to have been part of a coalition effort in Colorado that addresses people’s real needs by lowering costs and expanding access to dependable, affordable and equitable health care, especially in the wake of a pandemic,” Erin Huppert, United States of Care’s director of state external affairs and partnerships, said in a statement Wednesday.

Amendment removes penalties for doctors

The bill would require private insurers to offer three tiers of a standardized individual plan and small-group plan on Connect for Health Colorado, the state’s health exchange. Such plans make it easier for consumers to compare provider networks, premiums, copays and deductibles when choosing an insurance plan to purchase. Under HB-1232, the standardized plans would all have to include certain mandatory health care services.

The goal of the amended bill would be to achieve an 15%reduction in average premium costs over three years as compared with 2021 rates. That target is lower than what the sponsors originally had in mind, which was a 20% reduction in average premium costs.

Up to 15% of Coloradans would be affected by HB-1232, either because they already purchase individual or small-group plans on the exchange, or because they don’t currently have insurance for themselves, their family or their small business and may be interested in the lower-cost standardized plan, CCHI Deputy Director Adam Fox told Newsline previously. Those Coloradans would be able to shop for standardized plan options on the state’s exchange, but no one would be forced into choosing a particular plan.

“This is a huge accomplishment that will bring more affordable and equitable insurance options to Coloradans,” Fox said in a statement following the Senate’s Wednesday vote. “With 1.15 million Coloradans struggling to afford their health care pre-pandemic, this is a vital step forward to improve the health and financial security of Coloradans.”

An amendment Donovan introduced on the Senate floor would get rid of penalties for health care providers who didn’t accept the Colorado Option plan. The bill’s mandate for health care providers to serve people on the standardized plan regardless of the reimbursement rate has been a sticking point for doctors and health care workers.

House lawmakers will consider that amendment when they vote on the bill one last time. HELP US GROW Make a tax-deductible donation.

Editor’s note: This story first appeared on Colorado Newsline, which is part of States Newsroom, a network of news outlets supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com. Follow Colorado Newsline on Facebook and Twitter.